The bad news arrived in June 2010. After 40 years of receiving government funding, the Canadian Council for International Co-operation was cut off. The non-governmental organization was told no more money would come from the Canadian International Development Agency, the branch of Canada’s government that provides foreign aid to developing countries.

With its $2.7-million budget slashed by about two-thirds, CCIC cut its staff from 28 to eight, sold its office, sold a spun-off consulting company and raised the fees of its members — some 90 Canadian aid groups, including The United Church of Canada, who use CCIC as an umbrella organization to advocate for Canada’s development groups.

Critics charge that the funding cuts to CCIC are just one example of an alarming pattern: non-governmental organizations that criticize the government risk losing funding. The perception of political interference is having a chilling effect on some NGOs.

“I would say there’s no tolerance in this government for criticism of key policies of the government,” says Julia Sanchez, now the president-CEO of CCIC. “People are very, very scared to talk.”

Then again, other organizations say they see no reason to worry. Should NGOs really be afraid to criticize CIDA? And why should they expect to bite the hand that feeds them, anyway?

Anyone looking for examples of “chill” can find several. In November 2009, KAIROS — an ecumenical justice organization supported by churches, including The United Church of Canada — was turned down for $1.75 million in annual funding, after then Minister Bev Oda wrote “not” on the approval memo; the loss of funds was allegedly linked to the group’s pro-Palestinian stance, although some observers wonder if officials confused KAIROS with Kairos Palestine, an unrelated organization.

In May 2010, Senator Nancy Ruth advised aid groups to “shut the f— up” about abortion when discussing the government’s child and maternal health initiative for the G8 summit, a salty remark seen by some as a threat.

In February 2012, the Mennonite Central Committee announced its proposed projects to supply food and water in seven countries had been turned down. Though the MCC won’t speculate about the reason, its Mining Justice campaign highlighted human rights violations among Canadian mining companies operating abroad.

In March 2012, the Catholic organization Development and Peace learned it would receive only one-third of its $9 million in annual funding from CIDA; it has been speculated that the group’s advocacy work played a role in the decision.

Significant changes started happening at CIDA when the agency announced in May 2009 that it was concentrating its efforts on 20 priority countries and three focus areas: food security, sustainable economic growth, and children and youth. More controversially, CIDA also began requiring NGOs to submit project proposals and compete against each other for funding, instead of providing long-term funding for a period of years as it used to do.

Other changes are more subtle. Jennifer Henry, the executive director of KAIROS, suggests that CIDA now views aid groups as service providers rather than true partners. Henry and others say CIDA has moved away from funding research, human rights advocacy and long-term development projects, and toward short-term relief and humanitarian work.

Stephen Brown, an associate professor of political science at the University of Ottawa, says NGOs are “terrified” to speak out.

“I think the government has driven a wedge in the NGO community, where many of the NGOs, particularly the large ones, won’t criticize anything and will just do whatever the government wants to get the money. And then smaller ones that will risk losing funding, they often do [criticize government]. They’re doing what civil society is supposed to do, which is hold the government accountable, open space for public debate, rather than, quite frankly, be sycophantic, like some NGOs are.”

Brown argues that “progressive” organizations, like KAIROS, are being cut along with NGOs that criticize the Canadian government and the mining industry, while NGOs he calls “evangelical,” which focus on service delivery and less on systemic justice, get more funds.

Like other NGOs, the Partners in Mission unit of The United Church of Canada is challenged by the shift to a new funding system that asks NGOs to submit proposals and compete for CIDA funding. After receiving CIDA funding since the 1960s, Partners in Mission saw the end of its current funding last month, almost $1 million given annually by CIDA (the rest of its budget — $4.5 million — comes from the Mission and Service Fund).

“We suspect that the issues that we’re experiencing are coming from the political masters, not from within CIDA. We’ve tried to address that by having conversations with members of Parliament,” says Jim Hodgson, the United Church’s regional program co-ordinator for Latin America and the Caribbean.

A proposed project to support human rights in Bolivia, Peru and Colombia is on hold. But Hodgson wonders if such a proposal would be accepted by CIDA, given how similar the United Church’s public advocacy is to that of KAIROS. “Would the answer to our request be any different than the reply to KAIROS?” Still, the United Church has no plans to avoid speaking out on public policy issues, Hodgson says.

Not everyone in the NGO community agrees there is a chill. At World Vision Canada, a Christian organization affiliated with the Evangelical Fellowship of Canada, Harry Kits works as a senior policy adviser for economic justice. He says his organization’s “conversation” with CIDA includes calling or visiting its staff, as well as public lobbying on issues like putting maternal and child health care on the agenda of the 2010 G8 meeting or passing Bill C-293 mandating that Canada’s development aid focus on reducing poverty.

“We don’t feel like we’re shut out. And we continue to have conversations that are positive and have conversations that are sometimes critical,” says Kits. At the same time, he sees how organizations, big and small, that depend on CIDA for a large portion of funding might worry. In contrast, only four percent of World Vision’s $399-million income comes from CIDA.

It’s a point worth pondering: if small NGOs are financially vulnerable, it may be because they rely too heavily on CIDA. For example, before 2009, CIDA funding accounted for 45 percent of KAIROS’s budget.

Jim Cornelius, executive director of the Canadian Foodgrains Bank (of which The United Church of Canada is a member), says his NGO has regular policy discussions with CIDA as a member of the Canadian Food Security Policy Group without any chilling effect — and Foodgrains continues to receive $25 million each year from CIDA, about 65 percent of its budget. Cornelius says any chill (real or perceived) might be differently experienced by NGOs that take a confrontational approach on policy matters versus an engagement approach.

Kevin McCort at CARE Canada agrees. The president and CEO says his non-religious aid and development organization doesn’t criticize its donors, including CIDA (which provides about 25 percent of CARE’s $150-million annual budget).

“It’s a philosophical position for us: we do not believe that you can influence, positively, a donor by publicly criticizing them. It’s just not sensible,” says McCort.

He says CARE expresses any disagreements with CIDA privately and not in the media. According to McCort, while other NGOs have strong reasons for going public with their disagreements, CARE is not an activist organization.

“The people that we’re serving are not served by us going off on a political campaign that results in less resources for them. Some people would say [that’s] self-censorship, but it’s done with the perspective of our beneficiaries in mind.”

Responding to CIDA’s critics, Minister of International Co-operation Julian Fantino is blunt. “I think some people believe that CIDA only exists to keep NGOs afloat,” he told reporters in November. “That’s not going to be the case.”

On a practical level, though, CIDA needs the NGOs to carry out government projects as much as NGOs need CIDA funding. NGOs may have partnerships with grassroots-level groups or experience working in countries where the Canadian government doesn’t. Furthermore, NGOs can often undertake development projects more cheaply than governments.

Fantino’s press secretary turned down an interview with The Observer, referring the request to CIDA. Darren Schemmer is the vice-president of CIDA’s Partnerships with Canadians Branch, the office that determines which Canadian aid groups receive funding. He says working with a variety of NGOs allows CIDA to choose the organizations that offer the most effective approach or have the best connections for a specific project.

“It’s a little like doing a bathroom renovation. You could do it yourself, or you could go out and get three bids and see who could do it for you better. And you know, not many of us can renovate a bathroom by ourselves.”

Asked about a perceived chill among NGOs, Schemmer said CIDA has no view on that topic.

More recent changes at CIDA continue to raise eyebrows. In September 2011, CIDA blessed partnerships between four Canadian mining companies and NGOs, who are supposed to show the companies how to do effective development work in communities affected by mining. Then last November, Fantino said the government intends to pursue more partnerships between CIDA and private companies in mining and other sectors. (CIDA has a long history of engaging with the private sector and promoting Canadian business abroad, including the CIDA-INC program, now within the Department of Foreign Affairs and International Trade.)

This past February, CIDA was criticized for funding a Uganda latrines project by Crossroads Christian Communications, an evangelical group that listed homosexuality as a perversion and a sin on its website. (After Canadian Press reporters asked Crossroads for comment, the page was removed.) Uganda is currently drawing international headlines — and ire from the Canadian government — for considering lifetime sentences for homosexual citizens.

Industry observer Betty Plewes, who has worked in the Canadian development field for 40 years, feels alarmed about the changes that have tended to silence NGOs for fear of displeasing CIDA. “In my view, with the changing nature of government-civil society relationships, I think we are seeing the end of an era. It’s a different relationship than we have seen over the past 40 years.”

Involving private companies in development isn’t new, she says. But it is new to see CIDA funding partnerships with mining companies.

Meanwhile, NGOs are finding ways to deal with the new reality of CIDA funding. Some are appealing to supporters to increase their donations. Others are adjusting their budgets. Oxfam Canada will see its long-term program agreement with CIDA end next March. Recognizing that CIDA will no longer pay for public education and advocacy work in Canada, the organization closed its Halifax office and will close its Saskatoon office. And while Oxfam still seeks CIDA program funding, it’s also trying to diversify its income.

Robert Fox, the executive director of Oxfam Canada, says his organization will continue to speak out, even if this might offend CIDA and the government. He draws inspiration from partner organizations in the developing world, who sometimes run great risks to do their work.

“We’re not criticizing CIDA to criticize CIDA. We’re expressing concern because it has an effect on our mission, which is to end poverty and injustice. But if Oxfam — as a well-known organization that enjoys support from across the country and has an international reputation — can’t speak out on issues around development effectiveness and ending poverty, who can?”

The executive director of the Mennonite Central Committee, Don Peters, says if he needed to criticize CIDA, he would do it in person rather than through the media. But his organization “needs to speak with the voice and integrity of the partners that we come in contact with,” he says, choosing his words carefully. “We need to speak with compassion and integrity, but we must speak out of the experience that we have, and out of what we hear from our southern partners. We have that obligation.”

Susan Peters is a writer and editor in Winnipeg.

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This story first appeared in The United Church Observer’s April 2013 issue with the title “The big chill.”